Donald R. Keough, who led Coca-Cola through the disastrous introduction of New Coke in 1985 and the return of the original formula just 10 weeks later, died on Tuesday in Atlanta, his family said. He was 88.
When the company introduced New Coke, using a sweeter formula that many consumers said they preferred to the original and to Coke’s longtime rival Pepsi-Cola, it knew it was taking a risk. But the reaction was far more intense than Coke had anticipated.
“All of the time and money and skill that we poured into consumer research could not reveal the depth of feeling for the original taste of Coca-Cola,” Mr. Keough said at a news conference when the reversal was announced.
“Some cynics say we planned the whole thing” as a marketing ploy to drive up sales, he said. “The truth is we are not that dumb and we are not that smart.”
Nonetheless, the original formula’s return as Coca-Cola Classic led to a jump in overall sales. (The word Classic remained on the label until 2009.)
Mr. Keough later suggested that his tombstone should read, “He’s not that dumb and he’s not that smart.”
He was born in Maurice, Iowa, on Sept. 4, 1926, and served in the Navy at the end of World War II. He then attended Creighton University in Omaha, where he hosted “The Coffee Counter,” a local TV talk show. It preceded one hosted by Johnny Carson.
“He used to tell a story about how he was a young guy in Omaha and just wanted to be in TV,” said the Rev. John I. Jenkins, president of the University of Notre Dame, where Mr. Keough was chairman of the board for many years. “But then there was this other young guy, he would say, who used to work twice as hard as he did — Johnny Carson.”
Tired of chatting over coffee, Mr. Keough decided to learn the coffee business, and in 1950 he joined the Paxton & Gallagher Company, a wholesale grocery business and maker of Butter-Nut Coffee. In 1964 the company was absorbed by Coca-Cola.
Coca-Cola eventually gave up on the coffee business, but not on Mr. Keough. He headed the company’s food division in the early 1970s, and when Coca-Cola bought Columbia Pictures in 1982, he became the studio’s chairman. (Both businesses have since been sold off.)
He also helped bring Warren E. Buffett, an old friend from Omaha, onto Coke’s board, where he served for 20 years. Berkshire Hathaway, Mr. Buffett’s investment firm, is Coca-Cola’s largest shareholder, and Mr. Buffett’s son Howard is on its board.
In 1981, Mr. Keough became president and chief operating officer and right hand to Roberto C. Goizueta, Coca-Cola’s chairman and chief executive. New Coke notwithstanding, Coca-Cola became a global titan in the dozen years they shared leadership.
Mr. Keough retired from Coca-Cola in 1993, and the next day he joined Allen & Company, a boutique investment bank, as chairman.
He was a close friend and confidant of Herbert Allen Jr., the son of the firm’s founder, and a fixture at the company’s annual conference in Sun Valley, Idaho, which rivals the World Economic Forum in the boldface names and corporate leaders it attracts.
In 2008, at Mr. Buffett’s urging, Mr. Keough revisited the New Coke debacle in a book, “The Ten Commandments for Business Failure.” One commandment was “Assume infallibility.”
“The word ‘success’ has always made me nervous, because I believe built into that word are a couple of viruses — arrogance and complacency — and left unchecked, they can ensure failure,” Mr. Keough told The New York Times that year.
He served on the board of Notre Dame, which five of his six children attended, for 13 years.
“His gifts to us have really been transformative,” Father Jenkins said. “We’re the Fighting Irish, for instance, but we had nothing to speak of in terms of Irish studies until his gift in the 1990s, and today we’re the most important center of Irish studies outside Ireland.”
Last year the university announced it was opening its first new college in almost a century, the Donald R. Keough School of Global Affairs.
Mr. Keough is survived by his wife, Marilyn; his daughters Kathleen Soto, Shayla Rumely and Eileen Millard; his sons Michael, Patrick and Clarke; 18 grandchildren; and two great-grandchildren.
In his 2008 Times interview, Mr. Keough spoke about a lesson he learned from working in the stockyards of Sioux City, Iowa.
“When I was 15 or 16 years old, I got a job buying bulls to ship to processing plants back East,” he said. “I worked for a man named Doyle Harmon, and my first day on the job, he chastised me for paying too much. He said, ‘Concentrate on the bull, not on the language of selling.’ I’ve made most of the mistakes in my career by not concentrating on the bull.”
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